SOURCE: Prospect Capital Corporation

Prospect Capital Corporation

April 08, 2014 07:00 ET

Prospect Capital Invests $92 Million of Debt and Equity in Echelon Aviation

NEW YORK, NY--(Marketwired - Apr 8, 2014) - Prospect Capital Corporation (NASDAQ: PSEC) ("Prospect") announced today that Prospect has invested $92 million of debt and equity in Echelon Aviation LLC ("Echelon"). Prospect is the controlling shareholder of Echelon.

Established in 2014, Echelon is an aircraft leasing company. Concurrent with the Prospect investment and management team co-investment, Echelon has acquired the majority stake of a diversified portfolio of 11 commercial aircraft, including narrow-body, wide-body, and regional jets. With a weighted average five year lease term, the aircraft lessees include six global and regional airlines that are well positioned in their respective markets to capitalize on high air traffic growth trends. One of the largest full-service aircraft leasing companies in the world acts as the servicer of this portfolio, and this servicing company has made a significant minority co-investment in the portfolio.

Echelon is led by Marc Cho, who brings to the company over 17 years of aircraft leasing experience at Bank of America Merrill Lynch, DVB Bank, GE Capital Aviation Services, and Heller Financial.

"Our initial acquisition creates an asset base with highly marketable aircraft body types with a strong focus on downside protection through leases to creditworthy global carriers," said Marc Cho, President of Echelon. "We look forward to growing Echelon with the capital backing of Prospect, which brings to bear a rigorous underwriting approach, access to scale-driven capital, and time-sensitive decision making as significant differentiators in the aircraft leasing marketplace."

"The aircraft leasing sector presents attractive return opportunities due to cash flow consistency from long-lived assets coupled with hard asset collateral," said Sachin Sarnobat, Principal of Prospect Capital Management LLC. "We are pleased to support the growth of Echelon Aviation and are delighted to have Marc on board as an industry veteran to lead the business."

Currently with over $6 billion of capital under management, Prospect closed approximately $3.3 billion of new originations during the year ended March 2014.

ABOUT PROSPECT CAPITAL CORPORATION

Prospect Capital Corporation (www.prospectstreet.com) is a business development company that focuses on lending to and investing in private businesses. Prospect's investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940 ("1940 Act"). Prospect is required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. Prospect has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to Prospect could have an adverse effect on Prospect and its shareholders.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under Prospect's control, and that Prospect may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and Prospect undertakes no obligation to update any such statement now or in the future.